SEC Filings

Income from operations decreased due to various factors including an increase in cost of products sold of
$1.2 million, consistent with the increase in sales and due to a shift in product mix toward products using higher cost raw materials. We incurred start-up costs related to new product launches during the
third quarter of 2017.

PRECISION ENGINEERED PRODUCTS GROUP

Within our PEP segment, we combine materials science expertise with advanced engineering and production capabilities to design and manufacture a broad range of
high-precision metal and plastic components, assemblies, and finished devices for the medical, electrical, automotive and aerospace end markets.

Three Months Ended September 30,

2017

2016

$ Change

Net sales

$

66,492

$

66,222

$

270

Volume

$

(735

)

Foreign exchange effects

93

Price/material inflation pass-through/mix

912

Income from operations

$

7,922

$

9,913

$

(1,991

)

Net sales increased during the third quarter of 2017 from the third quarter of 2016 primarily due to the overall improvement
in demand across the medical end market, which resulted in a favorable sales mix.

The decrease in income from operations was primarily due to a shift in
product mix toward higher cost raw materials and new program setup costs for certain products sold into the aerospace end market.